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Sleeping bag exports to US face hurdles

Duty waiver is likely to discontinue

Refayet Ullah Mirdha
Hopes for duty-free exports of sleeping bags to the US market slip away from Bangladesh as the revival of the generalised system of preferences seems far off, said exporters yesterday.
The Obama administration is now refusing to give foreigners the facility as Exxel Outdoors Inc, a sleeping bag maker in the US, objected to allowing duty-free import of the item.
The US government blocked preferential access to goods from least developed countries (LDCs) in January. The facility had been in place since 1974.
The tenure of the old GSP scheme expired on December 31 and the US plans to announce a comprehensive new GSP later, said an official of the commerce ministry in Dhaka.
The issue is now being negotiated with the US government, the official said.
Sleeping bags were included on the proposed comprehensive GSP list, but later it was dropped when Senator Jeff Sessions of Alabama lodged an objection in December to its duty-free import.
Sessions argued that sleeping bags should be subject to tariff, like other textiles, because the item competes with American manufacturers.
The Bangladesh ministry official said, "I submitted the petition in March, but I am not hopeful about getting the duty-free facility as the senator recommended imposing duties on the import of sleeping bags from Bangladesh.”
Sessions said he was looking out for Exxel Outdoors Inc, which makes more than two million pieces of sleeping bags a year. The company has been pressing the Obama administration to lift an exemption that lets Bangladesh export sleeping bags without paying a 9 percent tariff.
Shamima Parvin, a manager of Northpole Bd Ltd, a sleeping bag manufacturing factory in Chittagong Export Processing Zone, said they have already urged the Bangladeshi government to negotiate with the US about the issue of duty-free access.
She said Bangladeshi sleeping bags enjoyed the duty waiver previously, but with the objection from the senator, Bangladesh was removed from the list.
Duties on the export of sleeping bags to the US vary between 10 percent and 40 percent, while the average duty for the itemis 12 percent, Parvin said.
"The sleeping bags manufacturing industry in Bangladesh is still new and only two or three companies are making the item. It is growing, but imposing duties will hamper growth,” she said.
"We want the US to renew the GSP and include Bangladeshi sleeping bags,” she added. The trade programme allows about 4,800 different products from 131 countries to be imported duty-free.
The US government agreed to grant a 97 percent duty-free facility to the LDCs at the Hong Kong Ministerial meeting of the World Trade Organisation in 2005. But major export items, such as garments, leather goods and footwear, were not included on the list.
As a result, the country is doing business with the US by paying a 17 percent duty on an average and the highest duty of 32 percent on manmade fibre clothes.
In fiscal 2010-11, Bangladesh exported knitwear items worth $1.12 billion and woven garments worth $3.50 billion to the US, according to data from Export Promotion Bureau.
In 2010, Bangladesh paid $630 million in duty to export goods to the US, data showed.
reefat@thedailystar.net